Tim Worstall

Well, Yes

In Hull, residents living more than a mile from the
river have been told their premiums will double. Pauline Chadwick, 55,
who was not affected by this year’s flooding, said her home was
protected by flood defences yet her premium still rose.

She
said: "Before the flooding in June, I was paying £25 a month, but I
then got a letter saying that because my premises were in a high-risk
area, the cost would be going up to £53 a month. They just seem to be
punishing people who live in the same area that flooding occurred."

What does anyone expect insurers to do? If events show that the risk of flooding is higher than previously believed then of course premiums will rise.

Although I’m certain there’s someone out there thinking that as the flooding shows that insurance is even more necessary then the price ought to come down.

In

3 responses

  1. windowlicker Avatar
    windowlicker

    Although I’m certain there’s someone out there thinking that as the flooding shows that insurance is even more necessary then the price ought to come down.
    Is this an allusion to “economist” Stephanie Flanders desperately silly questions to Cameron on last Wednesday’s Newsnight? In any case, how come you haven’t commented on it yet?
    Tim adds: Because I didn’t see it? Never do watch TV….well, not unless it’s the rugby.

    Reply
  2. Mark Wadsworth Avatar
    Mark Wadsworth

    Insurancde premiums (premia?) are a very useful guide as to whether local authorities should be spending on flood defences.
    As long as local property owners are paying this via land value tax, the cost:benefit analysis is quite simple.

    Reply
  3. The Remittance Man Avatar
    The Remittance Man

    So, one insurance company has put up its premiums probably based on a blanket decision made elsewhere by some accountant.
    I spot an opening for another insurance company prepared to hire someone with a degree in say geography (or at least the ability to understand contour maps) to do their risk assesments.
    It’s called the free market.

    Reply

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